KINGDOM OF SAUDI ARABIA

CAPITAL MARKET AUTHORITY

MERGER AND ACQUISITION REGULATIONS

English Translation of the Official Arabic Text Issued by the Board of the Capital Market Authority Pursuant to its Resolution Number 1-50-2007 Dated 21/9/1428 H Corresponding to 3/10/2007 Based on the Capital Market Law issued by Royal Decree No. M/30 dated 2/6/1424H

Amended by Resolution of the Board Of the Capital Market Authority Number 2-4-2012 Dated 28/2/1433H Corresponding to 22/1/2012G

Arabic is the official language of the Capital Market Authority

The current version of these Regulations, as may be amended, can be found at the CMA website: www.cma.org.sa

TABLE OF CONTENTS

Part 1: General Provisions Article 1 : Definitions Article 2 : Extent & scope of the Regulations Article 3 : General principles Article 4 : Waiver Part 2: Rules of Offer Article 5 : The approach Article 6 : Announcements and takeover timetable Article 7 : Independent advice Article 8 : Prohibitions and restrictions on dealings Article 9 : Purchases resulting in an obligation to offer a minimum level of payment Article 10 : Consequences of certain dealings Article 11 : Disclosure of dealings during the offer period, indemnity and other arrangements Article 12 : The mandatory offer Article 13 : The permissive offer Article 14 : The acceptance condition Article 15 : Nature of payment to be offered Article 16 : Compliance of the offer with Competition Law Article 17 : Subjective conditions Article 18 : Where there is more than one class of share capital Article 19 : Special deals with favourable conditions Article 20 : Announcement of acceptance results Article 21 : The use of proxies and other authorities in relation to acceptances Article 22 : Information relating to an offer Article 23 : Equality of information Article 24 : Restrictions on frustrating action Article 25 : Responsibilities of the offeree company regarding registration procedures Article 26 : Offer documents Article 27 : Offeree board circulars Article 28 : Documents to be on display Article 29 : Profit forecasts Article 30 : Asset valuations Article 31 : Publication of the offer document and the offeree board circular Article 32 : Timing of the offer Article 33 : Revision of offer Article 34 : Right of withdrawal Article 35 : Reduction in company securities Article 36 : Related party takeovers Part 3: Enforcement of these Regulations Article 37 : Powers and duties of the Authority to enforce these Regulations Part 4: Publication and Entry into Force Article 38 : Publication and entry into force

PART 1
GENERAL PROVISIONS Article 1 : Definitions a. Any reference to the "Capital Market Law" in these Regulations shall mean the Capital Market Law issued by Royal Decree No.M/30 dated 2/6/1424H. Expressions and terms in these Regulations have the meaning which they bear in the Capital Market Law and in the Glossary of defined terms used in the Regulations and Rules of the Capital Market Authority, unless the contrary intention appears.

b.

Article 2 : Extent & scope of the Regulations a. The Regulations apply in any situation where there is a restricted purchase of, or a restricted offer for shares relating to any listed company. The persons to whom the Regulations apply include: 1. Exchange participants, including (without limitation) issuers, shareholders, authorised persons, and any person involved directly or indirectly in, or giving an opinion on, any transaction regulated by these Regulations; directors of companies which are subject to these Regulations; and any person who seeks to or consolidate effective acquisition of such companies.

b.

2. 3. c.

These Regulations should be read in conjunction with and in addition to the provisions of the Listing Rules.

Article 3 : General principles a. The boards of an offeror and the offeree company and their respective advisers must act in the best interests of their respective shareholders. All shareholders of the same class of an offeree company must be treated equally by an offeror. During the course of an offer, or when an offer is in contemplation, neither an offeror, nor the offeree company, nor any of their respective advisers may furnish information to some shareholders which is not made available to all shareholders. This principle does not apply to the furnishing of information in confidence by the offeree company to a bona fide potential offeror or vice versa. An offeror should only announce an offer after the most careful and responsible consideration in accordance with the provisions of these Regulations. An offeror should only announce an offer if it firmly believes that it can and will continue to be able to implement the offer; responsibility for advising the offeror in this connection rests on the financial adviser to the offeror. The financial adviser to any party to the offer should be independent and authorized by the Authority. Shareholders must be given sufficient information and advice from their board of directors to enable them to reach a properly informed decision and must have sufficient time to do so. No relevant information should be withheld from them. The Authority may issue guidance for the purposes of this paragraph.
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b. c.

e. f.

g.

Any document or advertisement related to an offer or potential offer, addressed by the offeror or the board of the offeree company or their respective advisers to shareholders, must be true, fair and not misleading. Parties involved in offers must take care that statements are not made in a way that may mislead shareholders or the Exchange. At no time after the board of the offeree company has reason to believe that a bona fide offer might be imminent may any action be taken by the board of the offeree company in relation to the affairs of the company, without the approval of the shareholders in general assembly, which could effectively result in any bona fide offer being frustrated or in the shareholders being denied an opportunity to decide on its merits. Where there are related parties to a transaction to which these Regulations apply, there must be full disclosure of the related party's interest in the transaction to the affected shareholders prior to completion of the transaction. Any such transaction must be on arm's length terms. Directors of an offeror and the offeree company must always, in advising their shareholders, act only in their capacity as directors and not have regard to their personal or family shareholdings or to their personal relationships with the offeror or offeree company, as applicable, and must at all times have regard to advice given in accordance with Article 7. It is the shareholders' interests taken as a whole, together with those of employees and creditors, which should be considered when the directors are giving advice to shareholders. Directors of the offeree company should give careful consideration before they enter into any commitment with an offeror (or anyone else) which would restrict their freedom to advise their shareholders in the future. Where an acquisition is contemplated as a result of which a person may incur an obligation to extend a general offer to all shareholders, he must, before making the acquisition, ensure that he can and will continue to be able to implement such an offer. A director shall not vote at a meeting of directors or of a committee of directors or a general assembly meeting on any resolution concerning an offer made under these Regulations or any other relevant matter where the director or any relative of his has a conflict of interest. In this context such a conflict of interest would arise if he had, directly or indirectly, an interest (including his shareholding in the offeree company, if the director is a director of the offeror company, or his shareholding in the offeror company, if the director is a director of the offeree company) or duty (including where the director of the offeror company holds a position of a director or a manager of the offeree company, and where the director of the offeree company holds a position as a director or a manager of the offeror company) which is material and which conflicts or may conflict with the interests of the company. For the purposes of these Regulations, an interest of a person who is a relative or an affiliate of a director shall be treated as an interest of the director.

h.

i.

j.

k.

l.

m.

n.

Article 4 : Waiver The Authority may waive a provision of these Regulations in whole or in part as it applies to any person, as may be necessary for the safety of the market and the protection of investors either on an application from that person or on its own initiative.

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PART 2
RULES OF OFFERS Article 5 : The approach a. b. An offer must be put forward in the first instance to the board of the offeree company or to its advisers. If the offer, or an approach with a view to an offer being made, is not made by the ultimate offeror or potential offeror, the identity of that ultimate offeror or ultimate potential offeror must be disclosed at the outset. A board of offeree company so approached is entitled to be satisfied that the offeror is, or will be, in a position to implement the offer in full.

c.

Article 6 : Announcements and takeover timetable a. Secrecy All persons privy to confidential information, and particularly price sensitive information, concerning an offer or contemplated offer must treat that information as secret and may only pass it to another person if it is necessary to do so and if that person is made aware of the need for secrecy. All such persons must conduct themselves so as to minimise the chances of a leak of information. b. When a public announcement is required A public announcement is required: 1. When a company is considering a potential takeover and an approach to a potential offeree company has been made and the parties have reached an understanding (including the relevant conditions) that an offer will be made; When a firm intention to make an offer (the making of which is not, or has ceased to be, subject to any pre-condition) is notified to the board of the offeree company from a serious source, irrespective of the attitude of the board to the offer; Immediately upon an acquisition of shares by that person which gives rise to an obligation to make an offer under Article 12 or a permission to make an offer under Article 13. The announcement should not be delayed while full information is being obtained; additional information can be the subject of a later supplementary announcement; When, following a bid approach, a company's shares are the subject of rumour and speculation or where there is a price movement of 20% or more above the lowest share price since the time of the approach or a price movement of 10% or more in a single day; When, before a bid approach has been made, the offeree company is the subject of rumour and speculation or where there is a price movement of 10% or more in a single day and there are reasonable grounds for concluding that it is the potential offeror's actions which have led to the situation; When negotiations or discussions are about to be extended to include more than a very restricted number of people (outside those who need to know in the companies concerned and their immediate advisers); or

2.

3.

4.

5.

6.

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7.

When a purchaser is being sought for a holding, or aggregate holdings, of shares listed on the Exchange carrying 30% or more of the voting rights of a company or when the board of a listed company is seeking one or more potential offerors; and i. the company is the subject of rumour and speculation or there is a price movement of 20% or more above the lowest share price since the time of the approach or a price movement of 10% or more in a single day; or the number of potential purchasers or offerors approached is about to be increased to include more than a very restricted number of people.

ii.

c.

Responsibilities of offeror and the offeree company 1. Before the board of the offeree company is approached, the responsibility for making an announcement lies only with the offeror. The offeror should, therefore, keep a close watch on the offeree company's share price for any signs of movement. The offeror is also responsible for making an announcement once an Article 13 obligation has been incurred or Article 12 applies to it. Following an approach to the board of the offeree company which may or may not lead to an offer, the primary responsibility for making an announcement will normally rest with the board of the offeree company which must, therefore, keep a close watch on its share price for any untoward movement of 20% or more above the lowest share price since the time of the approach or a price movement of 10% or more in a single day. Where the offer is to be recommended and an application to the Authority to grant a temporary suspension of trading in accordance with the Listing Rules is submitted and the Authority has granted such suspension, a possible alternative to an immediate announcement may be to obtain a suspension to be followed shortly by an announcement. A potential offeror must not attempt to prevent the board of an offeree company from making an announcement or requesting the Authority to grant a temporary suspension of trading, in accordance with the Listing Rules. The responsibility to make an announcement under Article 6 (b)(1) is a joint responsibility of the potential offeror and offeree company.

2.

3.

4.

d.

Takeover timetable 1. By no later than the date of the announcement required under Article 6 (b)(2) or (3), the offeror must approach the Authority for the purpose of establishing the takeover timetable. The Authority will adopt the takeover timetable in accordance with the provisions of these Regulations, including, without limitation, the timing for the following: i. ii. the delivery of the final offer document to the Authority for approval; the publication of the offer document approved by the Authority and the sending out of the same to the board of the offeree company; the publication of the board of the offeree company board circular; shareholders approval (if required); the earliest permitted first closing date of the offer;

iii. iv. v.

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vi.

the last date on which the offeree company may announce profit or dividend forecasts, asset valuations or proposals for dividend payments;

vii. the withdrawal of acceptances if the offer has not become unconditional as to acceptances; viii. the publication of "no increase" in the offer statements; ix. x. xi. the last date on which the offer can be declared unconditional as to acceptances; the last date for satisfaction of all other conditions; the last date for money or other consideration to be provided to the offeree shareholders; and

2. 3.

All Parties related to the offer must comply with the takeover timetable as specified in 6(d)(1). The Authority must be notified immediately if the offeror or the offeree company cannot comply with the adopted takeover timetable as specified in Article 6(d)(1). The Authority has discretion to take any appropriate action. The Authority may, in any circumstances, amend the adopted takeover timetable referred to in accordance with Article 6(d)(1). Simultaneously with approaching the Authority in accordance with Article 6(d)(1), the offeror must provide the Authority with the offer document substantially in the form prescribed by Article 26. The takeover timetable as specified in Article 6(d)(1) must be published in such manner as the Authority may require.

4.

5.

e.

The announcement of a possible offer 1. Except in the case of a mandatory offer under Article 12 or a permissive offer under Article 13, before a firm intention to make an offer has been notified, a brief announcement by the offeree company that talks are taking place or that a potential offeror is considering making an offer (without disclosing the name of the potential offeror) must be made. When an announcement has been made in accordance with Article 6(b)(4) or (5) above, the offeree company may request that the Authority set a time limit for the offeror to clarify its intentions in respect of the offeree company. If such a time limit is imposed, at some time on or before the expiry of that limit the offeror must publicly announce either a firm intention to make an offer, or that it does not intend to make an offer.

2.

f.

The announcement of a firm intention to make an offer 1. The announcement of a firm intention to make an offer should be made only when an offeror has every reason to believe that it can and will continue to be able to implement the offer. Responsibility for advising the offeror in this connection rests on the financial adviser to the offeror. When a firm intention to make an offer is announced, the announcement must contain: i. ii. the terms of the offer; the identity of the offeror;

2.

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iii.

details of any existing holding in the offeree company: A. B. which the offeror owns or over which it has shareholding control; which is owned or where the shareholding is controlled by any person acting in concert with the offeror; in respect of which the offeror has received an irrevocable commitment to accept the offer; in respect of which the offeror or any person acting in concert with it holds an option to purchase;

C.

D.

iv.

all conditions (including any conditions relating to acceptances, listing and increase of capital and any consent required by law) to which the offer or the publication of the offer document is subject; and details of any indemnity arrangement involving the offeror, the offeree company or any person acting in concert with the offeror or the offeree company in relation to relevant securities.

v.

3.

The announcement of an offer under Article 12 or 13 should include confirmation by the financial adviser or by another appropriate third party that resources are available to the offeror sufficient to satisfy full acceptance of the offer. The party confirming that resources are available must act responsibly in accordance with Article 3(d) and Article 26(d) and take all reasonable steps to assure itself that resources are available.

g.

Obligation on the offeree company to circulate announcements Promptly after the commencement of an offer period, a copy of the relevant announcement, or a circular summarising the terms and conditions of the offer, must be sent by the offeree company to its shareholders and to the Authority. Where necessary the offeree company board should explain the implications of the announcement.

h.

Consequences of a "firm announcement" When there has been an announcement of a firm intention to make an offer, the offeror must, except with the consent of the Authority, proceed with the offer unless the offer is subject to the prior fulfilment of a specific condition which has been made public and that condition has not been met.

i.

Statements of intention not to make an offer A person making a statement that he does not intend to make an offer for a company should ensure that the statement is clear and unambiguous. Such a person, or any person acting in concert with him, will be bound by that statement for a period of six months unless there is a material change of circumstances or there has occurred an event which the person specified in his statement as an event which would enable it to be set aside.

j.

Publication of an announcement about an offer or possible offer When an offer or possible offer is announced, the announcement must be published in typed format and sent to the Authority by any means as specified by the Authority.

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Article 7 : Independent advice The board of the offeree company must obtain competent independent advice from a financial advisor and inform its shareholders of the substances of such advice. The board of the offeror company must obtain competent independent advice from a financial advisor and inform its shareholders of the substance of such advice. Article 8 : Prohibitions and restrictions on dealings a. Prohibited dealings by persons other than the offeror 1. No dealings of any kind in securities or shareholding control of securities of the offeree company by any person, not being the offeror, who is privy to confidential price-sensitive information concerning an offer or contemplated offer may take place between the time when there is reason to suppose that an approach or an offer is contemplated and the announcement of the approach or offer or of the termination of the discussions. This prohibition includes dealings in securities of the offeror unless the offer is sufficiently small in the context of the business of the offeror that the fact of the proposed offer, if it were made public, would not have a significant impact on the market price of the securities of the offeror. No person who is privy to confidential price-sensitive information concerning an offer or contemplated offer may make any recommendation to any other person as to dealing in the relevant securities.

2.

b.

Restriction on dealings by the offeror and concert parties During an offer period, the offeror and persons acting in concert with it must not sell any securities in the offeree company except with the prior consent of the Authority. Sales below the value of the offer will not be permitted.

c.

Gathering of irrevocable commitments Any person proposing to contact a private individual with a view to seeking an irrevocable commitment to accept or refrain from accepting an offer or contemplated offer must consult the Authority in advance.

d.

Dealings in offeree company's securities by certain persons During the offer period, no financial adviser (or any Affiliate or Subsidiary of such adviser) to an offeree company (or any other person in its group, or any person acting in concert with it) shall: 1. either for its own account or on behalf of discretionary account, purchase offeree company shares or deal in derivatives referenced to such shares; make any loan to a person to assist him in making any such purchases or carrying out any such dealings referred to in sub-paragraph (d)(1) above save for lending in the ordinary course of business and on normal commercial terms to persons with which they have an established client relationship and in accordance with Article 44 of the Authorised Persons Regulations; or enter into any indemnity or option arrangement or any arrangement, agreement or understanding, formal or informal, of whatever nature, which may be an inducement for a person to retain, deal or refrain from dealing in relevant securities of the offeree company.

2.

3.

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Article 9 : Purchases resulting in an obligation to offer a minimum level of payment a. Purchases before an Article 6(f) announcement When an offeror or any person acting in concert with it has purchased shares in the offeree company: 1. 2. within the three month period prior to the commencement of the offer period; or prior to the three month period referred to in sub-paragraph (a)(1) above if required by the Authority,

the offer to the shareholders of the same class shall not be on less favourable terms than that purchase. b. Purchases after an Article 6(f) announcement 1. If, in the period from the announcement made in accordance with Article 6(b) (2) or (3) until the offer closes for acceptance, an offeror or any person acting in concert with it purchases shares at above the offer price (being the then current value of the offer), it shall increase its offer to not less than the highest price paid for the shares so acquired during that period. It must be announced, immediately after the purchase, that a revised offer will be made in accordance with this Article 9. The announcement should also state the number of shares purchased and the price paid.

Article 10 : Consequences of certain dealings Purchases of offeree company shares by a publicly announced offeror or any person acting in concert with it may give rise to obligations under Article 12, Article 13 or Article 15. Immediately after such a purchase, or immediately upon a purchaser becoming a publicly announced offeror, an appropriate announcement must be made. The announcement should also state the number of shares purchased and the price paid. Article 11: Disclosure of dealings during the offer period, indemnity and other arrangements a. Dealings by parties and by persons acting in concert Dealings in relevant securities by an offeror or the offeree company, and by any person acting in concert with an offeror or the offeree company, for their own account during an offer period must be publicly disclosed. b. Dealings by parties and by persons acting in concert for non-discretionary account Dealings in relevant securities during an offer period by an offeror or the offeree company, and by any person acting in concert with such persons, for the account of clients must be disclosed to the Authority. c. Dealings by 1% shareholders or more 1. A person who (alone or with any person acting in concert with it), during an offer period, owns 1% or more of any class of relevant securities of an offeror or of the offeree company or as a result of any transaction will own 1% or more, has a reportable interest. Any reportable interest, and any change in the level of any reportable interest, must be reported to the Authority at the end of each trading day.
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2.

3.

Reports made under this Article 11 may be made public by the Authority.

Article 12 : The mandatory offer a. Where a person or a group of persons acting in concert increase ownership of shares in a given company through a restricted purchase of shares or a restricted offer for shares so that such person or those with whom such person is acting in concert become the owner of 50% or more of a given class of voting shares listed on the Exchange, the Board shall have the right to exercise its power in accordance with Article 54 of the Capital Market Law to order such person to offer to purchase the shares of the same class it does not own on the terms set out in this Article 12 and in accordance with the other relevant provisions of these Regulations. Conditions and consents Except with the consent of the Authority, no acquisition of shares which would give rise to a requirement for an offer under this Article 12 may be made if the making or implementation of such offer would or might be dependent on the passing of a resolution at any general assembly of shareholders of the offeror or upon any other conditions, consents or arrangements. c. Competition regulation An offer under this Article 12 must, if appropriate, contain the terms required by Article 16 (b). d. Payment to be offered 1. An offer made under this 12 must, in respect of each class of share capital involved, be in cash or be accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert with it for shares of that class during the offer period and within 12 months prior to its commencement. The Authority should be consulted where there is more than one class of share capital involved. If the offeror considers that the highest price as specified in sub-paragraph (d)(1) above should not apply in a particular case, the offeror should approach the Authority which has discretion to agree an adjusted price. In no case will the offeror be compelled under this Article 12 to offer to purchase the remaining shares at a price exceeding the highest price he or a party acting in concert with him paid to purchase any of the shares of that company during the 12 months preceding the date of the board order in accordance with paragraph (a) of this Article 12.

b.

2.

3.

e.

Restrictions on exercise of rights by an offeror From the time when the offeror announces the intention to make an offer, no person who formally represents the interests of an offeror or persons acting in concert with it may be appointed to the board of the offeree company, nor may an offeror and persons acting in concert with it exercise the votes attaching to any shares held in the offeree company until the offer document has been posted.

f.

Filing with the Authority When an offer to which this Article 12 applies is made the offeror must file a report with the Authority detailing all relevant purchases of the offeree companys shares in the last 12 months.

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Article 13 : The permissive offer a. The permissive offer When: 1. any person acquires, whether by a transaction or a series of transactions, shares which (taken together with shares held, acquired or where shareholding control is vested in persons acting in concert with him) carry 30% or more of the voting rights of a company listed on the Exchange; or any person who, together with persons acting in concert with him, holds not more than 30% of the voting rights of a company listed on the Exchange and such person, or any person acting in concert with him, acquires additional shares which increase his percentage of the voting rights to more than 30%,

2.

such persons may extend an offer, in accordance with the relevant provisions of these Regulations, to the holders of any class of equity share capital, whether voting or non-voting, and also to the holders of any class of voting non-equity share capital of the offeree company. An offer for different classes of equity share capital must be comparable; the Authority should be consulted in advance in such cases. b. Obligations of other persons In addition to the person specified in paragraph (a) and without prejudice to the requirements of this Article, each of the principal affiliates or subsidiaries of the relevant group of persons acting in concert with him may, according to the circumstances of the case, extend an offer. c. Conditions and consents to a permissive offer under 13(a) 1. 2. A person to whom paragraph (a) applies may elect to make an offer at anytime. If a person to whom this rule applies elects not to make an offer; that person may not, without prior consent of the Authority and subject to conditions which the Authority considers appropriate: i. ii. iii. acquire any further shares in the relevant company; dispose of any shares in the relevant company; and co-operate with any other person in respect of a bid for the relevant company,

for a period of two years following the acquisition which caused this Article to apply to him. d. Other offers 1. A person to whom neither this Article nor Article 12 applies may elect to make an offer at any time in accordance with the applicable provisions of these regulations. Offers made under this paragraph must be conditional only upon the offeror having received acceptances in respect of shares which, together with shares acquired or agreed to be acquired before or during the offer, will result in the offeror and any person acting in concert with it holding shares carrying more than 50% of the voting rights.

2.

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Article 14 : The acceptance condition It must be a condition of any offer for voting equity share capital which, if accepted in full, would result in the offeror holding shares carrying over 90% of the voting rights of the offeree company that the offer will not become or be declared unconditional as to acceptances unless the offeror has acquired or agreed to acquire (either pursuant to the offer or otherwise) shares carrying over 50% of the voting rights attributable to: 1. 2. the equity share capital alone; and the equity share capital and the non-equity share capital combined.

Article 15 : Nature of payment to be offered a. When a cash offer is required A cash offer is required where shares of any class under offer in the offeree company are purchased for cash by an offeror or any person acting in concert with it during the offer period or in the 12 months prior to it, in which case the offer for that class shall be in cash or accompanied by a cash alternative at not less than the highest price paid by the offeror or any person acting in concert with it for shares of that class during the offer period or in the 12 months prior to it. b. Dispensation from highest price If the offeror considers that the highest price (for the purpose of paragraph (a)) should not apply in a particular case, the offeror should approach the Authority, which has discretion to agree an adjusted price. c. Non-cash payment 1. If the offeror is a company, it may make a non-cash offer that includes shares issued to the shareholders of the offeree company provided that: i. all shareholders of the same class of the offeree company are treated equally by the offeror; and where the offeree company's shareholders are offered shares in the offeror at a discount of more than 20% to the market price of the shares in the offeror as of the date of the offer, at least 50% of the consideration due to shareholders must be paid in cash unless the boards of both the offeror and the offeree agree otherwise.

ii.

2.

Notwithstanding the conditions in Article 15 (c)(1)(ii), the offeror may make a non-cash offer consisting entirely of shares issued to the shareholders of the offeree company, provided that the offeror can demonstrate that the shareholders who individually or acting in concert hold at least 5% of the voting rights in the offeree company have undertaken not to sell or otherwise dispose of their shareholdings in the offeror for at least 12 months following the day the shares are admitted to the official list.

Article 16 : Compliance of the offer with Competition Law a. Notification Where an offer would, if completed, be subject to the Competition Law, the offeror must state that this is the case in its announcement. The offeree company and the offeror must notify the Council of Competition Protection pursuant to the provisions of the Competition Law.
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b.

Requirement for appropriate term in offer Where an offer would, if completed, be subject to the Competition Law, it must be a term of the offer that it will lapse if the Council of Competition Protection notifies the offeror or the offeree company in writing that it objects to the deal or has placed it under study and review as specified in the Competition Law.

c.

Offer period ceases during competition reference period When an offer or possible offer is objected to by the Council of Competition Protection, placed under study or forms the subject of proceedings or inquiries pursuant to paragraph (b), the offer period will end. Any new offer must be announced within 21 days after the announcement of a final decision made that the transaction is permissible under the Competition Law. A new offer period will be deemed to begin on the date on which a final decision made that the transaction is permissible under the Competition Law. If there is no announcement of a new offer within 21 days after the announcement of a final decision made that the transaction is permissible under the Competition Law, this offer period will last until either the expiry of the 21 day period or the announcement by all relevant offerors (affected by the decision that the transaction is permissible under the Competition Law) that they do not intend to make an offer, whichever is earlier.

Article 17: Subjective conditions An offer must not be subject to conditions which depend solely on subjective judgements by the directors of the offeror or of the offeree company or the fulfilment of which is in their hands. Article 18 : Where there is more than one class of share capital a. Where an offeree company has more than one class of share capital, a comparable offer must be made for each class whether such capital carries voting rights or not; and the Authority should be consulted in advance. An offer for non-voting equity share capital should not be made conditional on any particular level of acceptances in respect of that class unless the offer for the voting equity share capital is also conditional on the success of the offer for the non-voting equity share capital. Classes of non-equity share capital need not be the subject of an offer, except in the circumstances referred to in Article 12(a) and Article 19. If an offeree company has options or subscription rights outstanding, the provisions of this Article apply to them.

b.

Article 19 : Special deals with favourable conditions An offeror or persons acting in concert with it may not make any arrangements with shareholders and may not deal or enter into arrangements to deal in shares of the offeree company, or enter into arrangements which involve acceptance of an offer, either during an offer period or when one is reasonably in contemplation, if there are favourable conditions attached which are not being extended to all shareholders. Article 20 : Announcement of acceptance results a. Timing and contents Two hours before the time on which the Exchange is due to open at the latest on the day following the day on which an offer is due to expire, or becomes or is declared unconditional as to acceptances, or is revised or extended, an offeror must make an appropriate announcement. The announcement must state the total number of shares and rights over shares as follows:

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1. 2. 3.

Shares which acceptances of the offer have been received; Shares held by the offeror before the offer period; and Shares acquired or agreed to be acquired during the offer period,

and must specify the percentages of the relevant classes of share capital represented by these figures. b. Consequences of failure to announce 1. If an offeror, having announced the offer to be unconditional as to acceptances, fails to comply with any of the requirements of paragraph (a) above, immediately after that any acceptor will be entitled to withdraw his acceptance, unless the Authority requires otherwise. If an offeror fails to make an announcement as required by paragraph (a) above, the Authority may suspend the listing of the offeree company until an appropriate announcement has been made.

2.

Article 21: The use of proxies and other authorities in relation to acceptances An offeror may not require a shareholder as a term of his acceptance of an offer to appoint a proxy to vote in respect of his shares in the offeree company or to exercise any other rights or take any other action in relation to those shares. Article 22 : Information relating to an offer a. Standards of care Each document or advertisement, related to an offer, issued, or statement made, during the course of an offer must, as is the case with a prospectus, satisfy the highest standards of accuracy and the information given must be adequately and fairly presented. This applies whether it is issued by the offeree company or the offeror direct or by an adviser on its behalf. b. Inaccurate statements Parties to an offer or potential offer and their advisers must not issue inaccurate or imprecise statements which, may mislead shareholders or the Exchange. e. Distribution and availability of documents and announcements Copies of all documents and announcements bearing on an offer and of advertisements and any material released to the media must at the time of release be lodged with the Authority and the advisers to all other parties to the offer. When the release is outside normal business hours, such advisers must be informed of the release immediately; special arrangements may need to be made to ensure that the material is delivered directly to them and to the Authority. No party to an offer should be put at a disadvantage through delay in the release of new information to it. Article 23 : Equality of information a. Equality of information to shareholders Information about companies involved in an offer must be made equally available to all shareholders as nearly as possible at the same time and in the same manner.

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b.

Equality of information to competing offerors Any information, including particulars of shareholders, given to one offeror or potential offeror must, on request, be given equally and promptly to another offeror or genuine potential offeror. This requirement will only apply when there has been an announcement of the existence of the offeror or potential offeror to which information has been given.

Article 24 : Restrictions on frustrating action a. Shareholders' consent in the general assembly During the course of an offer, or even before the date of the offer if the board of the offeree company has reason to believe that a bona fide offer might be imminent, the board must not, except in pursuance of a contract entered into earlier, without the approval of the shareholders in general assembly: 1. 2. 3. issue any authorised but unissued shares; issue or grant options in respect of any unissued shares; create or issue, or permit the creation or issue of, any securities carrying rights of conversion into or subscription for shares; sell, dispose of or acquire, or agree to sell, dispose of or acquire, assets of a material amount; or enter into contracts otherwise than in the ordinary course of business.

4. 5.

The notice convening such a general assembly of shareholders must include information about the offer or anticipated offer. b. Break-up fees 1. For the purposes of these Regulations a break-up fee is an arrangement which may be entered into between an offeror or a potential offeror and the offeree company pursuant to which a cash sum will be payable by the offeree company if certain specified events occur which have the effect of preventing the offer from proceeding or causing it to fail, including, without limitation, a recommendation by the offeree company board of a higher competing offer. Any break-up fee that is proposed must be of a minimal size (no more than 1% of the offer value) and the offeree company board and its financial adviser must confirm to the Authority in writing that the fee to be in the best interests of shareholders. Any break-up fee arrangement must be fully disclosed in the announcement made under Article 6 (f) and in the offer document. The Authority should be consulted prior to all cases where a break-up fee or any similar arrangement is proposed.

2.

3.

Article 25 : Responsibilities of the offeree company regarding registration procedures The board of the offeree company should ensure that the shareholder register is kept up to date during the offer period in accordance with the relevant Saudi law and regulations.

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Article 26 : Offer documents a. Financial and other information on the offeror, the offeree company and the offer 1. The offer document (including, where relevant, any revised offer document) must include: i. a heading stating that an independent financial adviser authorised by the Authority must be consulted if there is any doubt about the offer; the date when the document is published, the name and address of the offeror and, if any, of the person making the offer on behalf of the offeror; details of the securities for which the offer is made, including whether they will be transferred with or without any dividend; the total payment proffered; particulars of all documents required, and procedures to be followed, for acceptance of the offer; the closing market price for the securities to be acquired, and (in the case of a securities exchange offer) securities offered, for the first day in each of the six months immediately before the date of the publication of the offer document, for the last day before the commencement of the offer period and for the latest available date before the publication of the offer document (quotations stated in respect of securities listed on the Exchange should be taken from the official list and, if any of the securities are not so listed, any information available as to the number and price of transactions which have taken place during the preceding six months should be stated together with the source, or an appropriate negative statement); in the case of a securities exchange offer, particulars of the first dividend or interest payment in which the new securities will participate and how the securities will rank for dividends or interest, capital and redemption and a statement indicating the effect of acceptance on the capital and income position of the offeree company's shareholders. If the new securities are not to be identical with an existing security listed on the Exchange, full particulars of the rights attaching to the securities must also be included together with a statement of whether an application for listing has been or will be made to the Authority; and

ii.

iii.

iv. v.

vi.

vii.

viii. in the case of a securities exchange offer, the effect of full acceptance of the offer upon the offeror's assets, profits and business which may be significant for a proper appraisal of the offer. 2. The offer document must contain a prominent disclaimer in the form set out below: "The Capital Market Authority and the Saudi Stock Exchange do not take any responsibility for the contents of this offer document, do not make any representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this offer document." 3. Where the payment includes securities and the offeror is a company whose shares are not listed on the Exchange, the offer document must contain:

Page 15

i.

for the last 3 financial years for which the information has been published, turnover, net profit or loss before and after taxation or Zakat, the charge for tax or Zakat, extraordinary items, minority interests, the amount absorbed by dividends and earnings and dividends per share; a statement of the assets and liabilities shown in the last published audited accounts; a cash flow statement if provided in the last published audited accounts; all material changes in the financial or trading position of the company subsequent to the last published audited accounts or a statement that there are no known material changes; details relating to items referred to in sub-paragraph (i) above in respect of any interim statement or preliminary announcement made since the last published audited accounts; inflation-adjusted information if any of the above has been published in that form; significant accounting policies together with any points from the notes to the accounts which are of major relevance to an appreciation of the figures, including those relating to inflation-adjusted information; where, because of a change in accounting policy, figures are not comparable, this should be disclosed and the approximate amount of the resultant variation should be stated; the names of the offeror's directors; the nature of its business and its financial and trading prospects; and a summary of the principal contents of each material contract (not being a contract entered into in the ordinary course of business) entered into by the offeror or any of its subsidiaries during the period beginning two years before the commencement of the offer period, including particulars of dates, parties, terms and conditions and any payment passing to or from the offeror or any of its subsidiaries.

ii. iii. iv.

v.

vi. vii.

viii. ix. x.

4.

The offer document must contain information on the offeree company on the same basis as set out in sub-paragraphs (a)(3)(i) to (vii) of this Article. All offer documents must contain a description of how the offer is to be financed and the source of the finance. The principal lenders or arrangers of such finance must be named. Where the offeror intends that the payment of interest on, repayment of or security for any liability (contingent or otherwise) will depend to any significant extent on the business of the offeree company, a description of the arrangements contemplated will be required. Where this is not the case, a negative statement to this effect must be made. Where the payment includes securities which are to be admitted to trading on the Exchange, or includes securities issued by a company whose shares are listed on the Exchange, a prospectus in respect of the new securities must be prepared in accordance with the Listing Rules. If any document issued to shareholders of the offeree company in connection with an offer includes a recommendation or an opinion of a financial adviser for or against acceptance of the offer, the document must, unless issued by the financial adviser in question, include a statement that the financial adviser has given and not withdrawn his consent to the issue of the

5.

6.

7.

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document with the inclusion of his recommendation or opinion in the form and context in which it is included. 8. Where, in order to complete the proposed offer, the offeror is a company and intends to increase the amount of its share capital, the board of the offeror must make a presentation to the shareholders, during the General Assembly Meeting to approve the offer, of the following issues: i. a transaction overview, including a description of the following: A. B. C. D. E. F. G. H. ii. the transaction structure; the valuation of the offeree and method of payment proposed; the company name (if new); any approval required; the expected date of closing; employee consideration, if any; any proposed new management; and any proposed new board representative;

the offerors rationale for the proposed takeover, especially: A. B. a strength, weakness, opportunities and threats analysis; and a description of any synergies believed to be realisable by virtue of the takeover;

iii an overview of the offeree company and the industry of which it forms a part, including a description of the following: A. B. C. D. E. F. iv. products; location; history; sales; market share; and combination;

financial highlights: A. of the offeree company (revenues, net income, asset and dividends) for the past three financial years; B. of the offeror (revenues, net income, asset and dividends) for the past three financial years;

Page 17

C. contribution analysis; D. earning per share analysis of the offeree (to the extent known); and E. accretion & dilution analysis, to the extent known; and v. 9. growth outlook and next steps.

Such presentation must have been disclosed to, and approved by, the Authority in advance of such presentation.

b.

Shareholdings and dealings 1. The offer document must state: i. the shareholdings, and the size of any controlled shareholding, of the offeror in the offeree company; the shareholdings, and the size of any controlled shareholding, in the offeror (in the case of a securities exchange offer only) and in the offeree company in which directors of the offeror are interested; the shareholdings, and the size of any controlled shareholding, in the offeror (in the case of a securities exchange offer only) and in the offeree company which any persons acting in concert with the offeror own or have shareholding control of (with the names of such persons acting in concert); the shareholdings, and the size of any controlled shareholding, in the offeror (in the case of a securities exchange offer only) and in the offeree company owned or shareholding controlled by any persons who, prior to the publication of the offer document, have irrevocably committed themselves to accept the offer, together with the names of such persons; and the shareholdings, and the size of any controlled shareholding, in the offeror (in the case of a securities exchange offer only) and in the offeree company owned or shareholding controlled by a person with whom the offeror or any person acting in concert with the offeror has an arrangement of the kind referred to in 0Article 8(d)(3).

ii.

iii.

iv.

v.

2.

If in any of the above categories there are no shareholdings, this fact should be stated in the offer document. This will not apply to categories described in (iv) and (v) of subparagraph (b)(1) if there are no such irrevocable commitments or arrangements. If any party whose shareholdings are required by this Article 26 to be disclosed (whether there is an existing holding or not) has dealt for value in the shares in question during the period beginning 12 months prior to the offer period and ending with the latest day prior to the publication of the offer document, the details, including dates and prices, must be stated in the offer document. If no such dealings have taken place, this fact should be stated in the offer document.

3.

c.

Special arrangements The offer document must contain a statement as to whether or not any agreement, arrangement or understanding (including any compensation arrangement) exists between the offeror or any person acting in concert with it and any of the current directors or shareholders or any person who had been

Page 18

a director or shareholder of the offeree company within the last 12 months prior to the date of publication of the offer document, and full particulars of any such agreement, arrangement or understanding. d. Cash confirmation When the offer is for cash or includes cash, the offer document must contain a bank guarantee issued by a local bank guaranteeing the offeror's ability to satisfy full acceptance of the cash offer. e. Ultimate owner of securities acquired The offer document must contain a statement as to whether or not any securities acquired in pursuance of the offer will be transferred to any other persons, together with the names of the parties to any such agreement, arrangement or understanding and particulars of all securities in the offeree company held by such persons, or a statement that no such securities are held. f. Estimated value of unlisted securities payment When the offer involves the issue of unlisted securities which are intended to remain unlisted, the offer document and any subsequent circular from the offeror must contain an estimate of the value of such securities by a financial adviser. Article 27 : Offeree board circulars a. Views of the board The board of the offeree company must circulate its views on the offer, including any alternative offers, and must, at the same time, make known to its shareholders the substance of the advice given to it by the independent advisers appointed pursuant to Article 7. b. Views of the board on the offeror's plans for the company and its employees The circular of the board of the offeree company required under paragraph (a) of this Article should, insofar as relevant, include its views on the offeror's plans in respect of the offeree company and its employees. c. Shareholdings and dealings 1. The first circular from the board of the offeree company advising shareholders on an offer (whether recommending acceptance or rejection of the offer) must state: i. the shareholdings, and the size of any controlled shareholding, of the offeree company in the offeror; the shareholdings, and the size of any controlled shareholding, in the offeree company and in the offeror in which directors of the offeree company are interested; the shareholdings, and the size of any controlled shareholding, in the offeree company and (in the case of a securities exchange offer only) in the offeror owned or subject to shareholder control by a subsidiary of the offeree company, by a pension fund of the offeree company or of a subsidiary of the offeree company, or by an adviser to the offeree company, or by any person acting in concert with the offeree company; the shareholdings, and the size of any controlled shareholding, in the offeree company and (in the case of a securities exchange offer only) in the offeror owned or subject to
Page 19

ii.

iii.

iv.

shareholder control by a person who has an arrangement of the kind referred to in Article 8(d)(3) with the offeree company or with any person who is acting in concert with the offeree company; v. except with the consent of the Authority, the shareholdings in the offeree company and (in the case of a securities exchange offer only) in the offeror which are managed on a discretionary basis by fund managers who are connected persons with the offeree company; and whether the directors of the offeree company intend, in respect of their own shareholdings, to accept or reject the offer.

vi.

2.

If in any of the above categories, there are no shareholdings or controlled shareholdings, then this fact should be stated. If any party whose shareholdings or controlled shareholdings are required by Article 27 (c) (1) (i) or (ii) to be disclosed (whether there is an existing holding or not) has dealt for value in the shares in question during the period beginning 12 months prior to the offer period and ending with the last day prior to the publication of the circular, the details, including dates and prices, must be stated. In all cases, if no such dealings have taken place this fact should be stated. If any party whose shareholdings or controlled shareholdings are required by Article 27 (c)(1)(iii), (iv) or (v) to be disclosed (whether there is an existing holding or not) has dealt for value in the shares in question during the offer period and ending with the last day prior to the publication of the circular, similar details must be stated. In all cases, if no such dealings have taken place this fact should be stated.

3.

4.

d.

Material contracts The first circular from the board of the offeree company advising shareholders on an offer must contain a summary of the principal contents of each material contract (a contract for the total amount of consideration of 20% or more of the offeree company's annual revenues, where such contract is not entered into in the ordinary course of business) entered into by the offeree company or any of its subsidiaries during the period beginning two years before the commencement of the offer period, including particulars of dates, parties, terms and conditions and any consideration passing to or from the offeree company or any of its subsidiaries.

Article 28 : Documents to be on display a. Copies of the following documents must be made available for inspection from the date the offer document or offeree board circular is published until the end of the offer period: 1. memorandum and articles of association of the offeror and the offeree company or equivalent documents; audited consolidated accounts of the offeror and the offeree company for the last two financial years for which these have been published; any report, letter, valuation or other document any part of which is exhibited or referred to in any document issued by or on behalf of the offeror and the offeree company; written consents of the financial advisers given in accordance with Article 26 (a)(7); any document evidencing an irrevocable commitment to accept an offer;

2.

3.

4. 5.

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6.

documents relating to the financing arrangements for the offer where such arrangements are described in the offer document in compliance with Article 26(a)(5) ; and documents relating to break-up fees or similar arrangements.

7. b.

The offer document or offeree company board circular must state the place (being the registered address of the offeror company or the offeree respectively or such other place as the Authority may agree) where document required to be on display in accordance with paragraph (a) of this Article, can be inspected . A copy of each document required to be on display in accordance with Article 28 (a) must, on request, promptly be made available by the offeror or the offeree company to the other party and to any competing offeror or potential offeror.

c.

Article 29 : Profit forecasts a. Standards of care A profit forecast must be compiled with due care and consideration by the relevant board of directors with the assistance of such professional advice as they may require, whose sole responsibility it is; the financial advisers must satisfy themselves that the forecast has been prepared in this manner by the board of directors. b. Assumptions When a profit forecast appears in a document addressed to shareholders in connection with an offer, or in a press announcement, any assumptions on which the forecast is based should be included. c. Statements which will be treated as profit forecasts 1. An estimate of profit for a period which has already expired should be treated as a profit forecast. Except with the consent of the Authority, any unaudited profit figures published during an offer period must be prepared to the same standards as a profit forecast. This provision does not, however, apply to: i. unaudited statements of annual or interim results which have already been published; and any other unaudited statements of results which comply with the Listing Rules.

2.

ii. 3. 4.

A profit forecast for a limited period (e.g. the following quarter) is subject to this Article. The Authority must be consulted in advance if a profit warranty is to be published in connection with an offer. Earnings enhancement and takeover benefits statements: i. An offer party wishing to make earnings enhancement statements which are not intended to be profit forecasts must include within the statement an explicit and prominent disclaimer to the effect that such statements should not be interpreted to mean that earnings per share will necessarily be greater than those for the relevant preceding financial period.

5.

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ii.

An offer party should consult the Authority in advance if they are in any doubt about earnings enhancement and takeover benefits statements.

Article 30 : Asset valuations a. Valuations to be reported on if given in connection with an offer When a valuation of assets is given in connection with an offer, it should be supported by the opinion of a named independent valuer. The basis of valuation must be clearly stated. b. Current valuation A valuation must state the effective date as at which the assets were valued and the professional qualifications and address of the valuer. If a valuation is not current, the valuer must state that a current valuation would not be materially different. If this statement cannot be made, the valuation must be updated. Article 31 : Publication of the offer document and the offeree board circular a. Consent to the offer document 1. 2. 3. The offeror must submit the offer document to the Authority for its consent. An offer document may not be published without the prior consent of the Authority. The Authority will grant its consent to the offer document within 30 days of receiving all information and documentation required under these Regulations. If the Authority considers that the proposed offer may not be in the interest of investors or may result in a breach of the Capital Market Law or its Implementing Regulations, then it may take any of the following actions: i. carry out any enquiries which it considers appropriate including requiring the concerned person or its representative to appear before the Authority to answer the questions of the Authority and to explain any matters that the Authority considers relevant to the offer; require the concerned person or third parties to provide additional information or to confirm, in such manner as the Authority may specify, that the information provided is accurate; or defer making any decision for such period as may be reasonably necessary to carry out a further study and examination or to allow for additional information to be provided.

4.

ii.

ii.

5.

If, having taken action pursuant to sub-paragraph (a)(4) of this Article, the Authority determines that the offer to be made pursuant to the offer document is still not in the interest of investors or may result in a breach of the Capital Market Law or its Implementing Regulations, the Authority shall, after giving the offeror a suitable opportunity to be heard, issue a notification to the offeror stating that the consent of the Authority to the offer document is not granted. A notification under this sub-paragraph (a)(5) may include a prohibition on a further offer for the offeree company on such terms as the Authority sees fit. On receipt of a notification under sub-paragraph (a)(5) above, an offeror must notify the offeree company of, and publicly announce, the rejection of its offer document forthwith.

6.

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b.

Publication of the offer document The offer document must be published by, or on behalf of, the offeror in accordance with the timetable adopted by the Authority in accordance with Article 6 (d).

c.

The offeree company board circular The board of the offeree company should publish the circular containing its advise to shareholders on the offer in accordance with the takeover timetable adopted by the Authority in accordance with Article 6(d).

Article 32 : Timing of the offer a. Extent of the offer period 1. All periods relating to an offer (whether revised or not) must be in accordance with the takeover timetable adopted by the Authority under Article 6(d)), including the period during which the offer will be open, and the period when the offer may become or be declared unconditional as to acceptances. Where an offer is subject to the Competition Law, the offer may not become or be declared unconditional as to acceptances after the end of the period prescribed in the takeover timetable adopted by the Authority in accordance with Article 6(d). Where an offeror has stated that its offer will not be extended beyond a particular day, that offer may not become or be declared unconditional as to acceptances after that day. After an offer has become or is declared unconditional as to acceptances, the offer must remain open for acceptance for not less than the period prescribed in the takeover timetable adopted by the Authority under Article 6(d). When, however, an offer is unconditional as to acceptances from the outset, an extension is not required but the position should be set out clearly and prominently in the offer document.

2.

3.

4.

b.

Announcement that offer is unconditional as to acceptances On the last business day on which an offer may be declared unconditional as to acceptances an announcement should be made immediately after closing of trading in the Exchange as to whether the offer is unconditional as to acceptances or has lapsed. Such announcement should include, if possible, the details required by Article 20(a) but in any event must include a statement as to the current position in the count.

c.

Extension of Offer 1. There is no obligation to extend an offer the conditions of which are not met by the first or any subsequent closing date. In any announcement of an extension of an offer, either the next closing date must be stated or, if the offer is unconditional as to acceptances, a statement may be made that the offer will remain open until further notice. The Authority shall specify, in accordance with the takeover timetable adopted by the Authority under Article 6(d), the required notice period for shareholders.

2.

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d.

Time for fulfilment of all other conditions All conditions must be fulfilled or the offer must lapse within the period prescribed in the timetable adopted in accordance with Article 6(d).

e.

Settlement of payment The offer payment must be made within the period prescribed in the timetable adopted in accordance with Article 6(d).

f.

Offeree company announcements The board of the offeree company should not announce any material new information including trading results, profit or dividend forecasts, asset valuations or proposals for dividend payments after the date prescribed by the Authority in accordance with Article 6(d). Where the publication of such results would be required by the Listing Rules, the board should, as soon as the requirement is known, raise the issue with the Authority that will make a decision as it deems appropriate.

g.

Return of documents of title If an offer lapses, all documents of title and other documents lodged with forms of acceptance must be returned within 14 calendar days of the lapsing of the offer.

Article 33 : Revision of offer a. Entitlement to revised payment If an offer is revised, all shareholders who accepted the original offer must be entitled to the revised payment. b. New conditions for offers Subject to the prior consent of the Authority, and only to the extent necessary to implement an increased or improved offer, the offeror may introduce new conditions. Article 34 : Right of withdrawal A person who has accepted an offer must be entitled to withdraw his acceptance from the time prescribed in the takeover timetable adopted by the Authority under Article 6(d). Article 35 : Reduction in company securities a. Possible requirement to make an offer When for any reason the total number of a particular class of securities of a company listed on the Exchange is reduced, whether by redemption, repurchase or cancellation or otherwise, resulting in an increase in the percentage of voting rights held by a shareholder or group of shareholders acting in concert, the provisions of Article 12 and Article 13 will be applied as applicable. The Authority may waive any resulting obligation to make a general offer if there is a vote of independent shareholders. b. Limitation on subsequent acquisitions of shares Subsequent to the reduction referred to in paragraph (a) of this Article, all shareholders will be subject, in making further acquisitions of shares in the company, to the relevant provisions of these Regulations.
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c.

Redemption or purchase of securities by the offeree company 1. Shareholders' information If a notice for the general assembly of shareholders of the offeree company is sent for approval of redemption or purchase by the offeree company of its own shares during the course of an offer, or before the date of the offer if the board of the offeree company has reason to believe that a bona fide offer might be imminent, the board of the offeree company must include information about the offer or anticipated offer in the notice convening the general assembly. 2. Public disclosure For the purpose of Article 11, dealings in relevant securities include the redemption or purchase of, or taking or exercising an option over, any of its own relevant securities by the offeree company. The total amount of securities of the relevant class remaining in issue following the redemption or purchase must also be disclosed. 3. Disclosure in the offeree company board circular The offeree company board circular advising shareholders on an offer must state the amount of relevant securities of the offeree company which the offeree company has redeemed or purchased during the period commencing 12 months prior to the offer period and ending with the latest date prior to the publication of the circular, and the details of any such redemptions and purchases, including dates and prices.

d.

Redemption or purchase of securities by the offeror company 1. Public disclosure For the purpose of Article 11, dealings in relevant securities include the redemption or purchase of, or taking or exercising an option over, any of its own relevant securities by an offeror. 2. Disclosure in the offer document The offer document must state (in the case of a securities exchange offer only) the amount of relevant securities of the offeror which the offeror has redeemed or purchased during the period commencing 12 months prior to the offer period and ending with the latest date prior to the publication of the offer document and the details of any such redemptions and purchases, including dates and prices.

Article 36 : Related party takeovers a. Requirements to related party takeovers Where an offeror makes an offer to which these Regulations apply, and there exists any person who is a connected person with both the offeror and the offeree (a "related party"), the offer shall be made subject to the additional conditions set out in this Article. b. Shareholder consent as a precondition to offer 1. Any offer made in relation to which there is a related party shall be conditional on shareholder approval received in accordance with this Article.

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2.

The terms of the announcement of any offer made under 0Article 6 shall include reference to: i. the name of the related party and of any person acting in concert with him, and the fact that such person is a related party; and the fact that, by virtue of the existence of a related party in relation to the offer, the offer will be subject to a shareholders' vote as required by these Regulations.

ii.

3.

Where this Article applies to an offer, it must be a term of the offer that it will lapse if, by the closing date for the offer, the offeror has not obtained shareholder approval to the completion of the takeover. If requested by the offeror, the board of the offeree company must requisition a general assembly of shareholders and send a circular to shareholders prior to the date of such general assembly in accordance with the terms of its constitution. Such circular must include at a minimum: i. ii. a copy of the offer document; the details of any existing holdings of related party in each of the offeror and the offeree, including any holdings: A. which such person (or any person acting in concert with it) owns or over which it has shareholding control; in respect of which such person (or any person acting in concert with it) holds an option to purchase;

4.

B.

iii.

the details of any position of each such person in the offeror or the offeree as the case may be; details of any outstanding derivative referenced to the securities of the offeror or the offeree (or any of their affiliates) entered into by such person; a statement whether the directors (excluding the related party where relevant) are of the view that the proposed offer is fair and reasonable so far as the shareholders (other than the related party) are concerned, that the directors have reached such a view without the related party taking any role in the matter, and that the directors have been so advised by a competent independent adviser; and a statement (if relevant) that the related party has undertaken not to vote on the relevant resolution at the general assembly, and will procure that persons acting in concert with it will not vote.

iv.

v.

vi.

5.

At the shareholders' general assembly called in accordance with paragraph (4) above, the board shall ensure that the votes of the related party and of any of its person acting in concert with it are not counted in determining the resolution approving the offer. In the event that the resolution approving the proposed offer is not passed, the offer shall lapse and the offeror shall promptly notify the Authority of that fact.

6.

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PART 3
ENFORCEMENT OF THESE REGULATIONS Article 37 : Powers and duties of the Authority to enforce these Regulations a. The Authority has powers to: 1. ensure that the offeror and offeree company and their directors act in accordance with the principles and provisions in these Regulations; oversee and supervise conduct of the offeror and offeree company to ensure the principles and provisions in these Regulations are complied with; and give directions, issue orders, notices and make requirements and, in particular, adopt timetables for conduct of individual takeovers, to ensure the principles and provisions in these Regulations are complied with.

2.

3.

b.

Any person who is subject to these Regulations has the right to appeal to the Committee in respect of any action that the Authority takes under the provisions of these Regulations.

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PART 4
PUBLICATION AND ENTRY INTO FORCE Article 38 : Publication and entry into force These Regulations shall become effective upon their publication.

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